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23rd of September 2010
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September 20, 2010    

Gross mortgage lending falls again in August

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by Kay Murchie
Gross mortgage lending falls again in August

The Council of Mortgage Lenders (CML) has today revealed gross mortgage lending fell 6% in August compared with the same month last year to £11.4 billion.

The figure was also 14% lower compared with July and represented the lowest August monthly total since 2000, highlighting the ongoing sluggishness of the UK housing market.

Commenting on the figures, CML chief economist Bob Pannell, said: “We face the prospect of a difficult second half of the year.

“However, the Bank of England is likely to keep interest rates at record lows for longer to support the economy. This will continue to alleviate payment pressures for many borrowers,” he added.

Activity is also expected to slow as major spending cuts announced by the Government are likely to dent consumer confidence.

Since the credit crunch three years ago, lending criteria has tightened and first-time buyers, in particular, have struggling to get a foot on the property ladder, unless they have a large deposit.

Figures show first-time buyers now have to put down an average deposit of 24%.

In related news today, property website Rightmove has reported a further fall in asking prices in September.

According to Rightmove, asking prices for residential property in England and Wales fell by 1.1% in the 5 weeks to 11 September - the third consecutively monthly fall.

It follows falls of 1.7% in August and 0.6% in July.

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